Your income is what you earn. Your net worth is what you keep. Someone earning $200,000 per year with $180,000 in expenses has a lower net worth than someone earning $80,000 who saves and invests diligently.
How to Calculate Net Worth
Add up everything you own (assets): cash, investments, retirement accounts, home equity, vehicles. Then subtract everything you owe (liabilities): mortgage, loans, credit cards. The result is your net worth. It can be positive or negative.
Average Net Worth by Age (US Data)
- Under 35: Median ~$13,900 (Federal Reserve Survey of Consumer Finances)
- Age 35-44: Median ~$91,300
- Age 45-54: Median ~$168,600
- Age 55-64: Median ~$212,500
- Age 65-74: Median ~$266,400
Benchmarks to Aim For
- Under 30: Net worth of $50,000+ is a strong start.
- Age 30-40: Aim for 1x your annual income.
- Age 40-50: Target 3-4x your annual income.
- Age 50-60: Shoot for 6-8x your annual income.
- At retirement: 10-12x annual income for a comfortable retirement.
How to Grow Your Net Worth
There are only two levers: increase assets or decrease liabilities. The fastest path is doing both simultaneously: max out retirement contributions, pay down high-interest debt, avoid lifestyle inflation as your income rises, and invest consistently.